Trucking does not have a driver retention problem; trucking companies do
Carriers, Freight Research • Published on February 18, 2020
An abbreviated version of this article appeared on Trucks.com in February 2020
Driver turnover is notoriously high in the freight industry — with some estimates suggesting that, on average, trucking companies see their entire driver pool change over each year. Such eye-poppingly high turnover statistics would suggest a massive labor retention crisis. In a year when competition for drivers — and other front-line workers more broadly — is expected to become more intense, attracting and retaining drivers is understandably a focus across the freight industry
But changing jobs is not the same as changing careers. The proliferation of small and mid-sized trucking companies means that when the freight labor market tightens and competition for drivers heats up, drivers have many options. When a driver decides to leave a job, it is obviously a problem for that particular employer; but it is only a problem for the freight industry if the driver decides to stop hauling altogether. The focus on drivers who change employers — as opposed to drivers who change careers — risks overstating the challenge from an industry-level perspective.
This analysis looks at all the individuals who worked as a truck driver at any point point over the past two decades, and where they were a year later: Were they still working as a truck driver, where they still working but in a different type of job, were they unemployed, or did they exit the labor force? How have these trends evolved over time and over the freight industry business cycle?
The results point to five broad conclusions about driver retention in the freight industry:
The vast majority of truck drivers continue hauling loads a year later, but on average about one-third of drivers will stop driving over the course of a year.
The share of truck drivers who change careers each year is about average compared to other similar occupations.
Over the past half-decade, the share of drivers who change careers has declined slightly while the share who exit the labor force entirely has been trending higher (until very recently).
The share of drivers who decide to quit hauling loads is not necessarily higher when the freight economy slows down: It has more to do with the “pull” of opportunities elsewhere in the labor market than a “push” out of trucking.
Truck drivers were attracted to jobs in construction during the housing boom and to jobs in extractive industries during the fracking boom, but more recently they have been drawn to management, sales and office support jobs.
Most Drivers Continue Hauling Loads One Year Later
Since the current economic expansion began in July 2009, anywhere between 16 percent and 28 percent of truck drivers changed careers over the course of a year, averaging 23 percent per year over this period. (The share who change jobs includes individuals who change roles within the same company, such as moving into a management or sales role as well as those who make bigger career shifts; it does not include individuals who move to a similar role with a different employer.)
During the same period, anywhere from 4 percent to 9 percent (averaging 5 percent) exited the labor force altogether (mostly through retirement in recent years), and anywhere from 1 percent to 6 percent (averaging 3 percent) found themselves unemployed. This means that, in total, about one-third of truck drivers will not be hauling loads a year later, but about two-thirds continue to work in the same role.The figure below shows the full distribution of transition probabilities for each quarter since the start of the current economic expansion in July 2009.
The odds of remaining a truck driver are slightly higher among owner-operators, but primarily because they are slightly less likely to become unemployed or exit the labor force: Over the course of a year, 23 percent of owner operators decide to quit trucking and work in a different job, 5 percent exit the labor force, and 2 percent find themselves unemployed.
The share of truck drivers who change careers each year is about average compared to other occupations
The share of truck drivers who change careers in a given year (among those who remain employed) is lower than for occupations such as construction, manufacturing, and sales workers, or among software engineers. It is higher than among dentists, lawyers/judges, physicians, clergy, and postal service workers and is roughly on par with jobs like elementary and secondary school teachers, optometrists, and police officers.
In recent years, the share of drivers who change careers has been roughly stable
The odds of a truck driver leaving the profession for a new job has trended upward over the past two decades — even after controlling for some basic demographic characteristics such as age, race, sex and education. This shift has been uneven: Rising sharply during the early 2000s and the early 2010s but stabilizing during the latter half of both decades. The odds of becoming unemployed closely tracks the overall economy — spiking during the last recession before marching continuously lower since then, while the odds of exiting the labor force have trended sharply upward during the past half-decade.
It’s important to recall that this analysis controls for age, so the rising odds of a labor force exit are not necessarily driven by retirements. After the shifting age composition of the workforce is taken into account, the odds that a trucker will stop working in order to retire is actually slightly below its historic average. However, the odds that they will stop working because they are “unable to work” — which is the Census Bureau category typically associated with disability — has trended higher over the past half-decade.
There are not really differences in the odds a driver will change careers during freight industry expansions and contractions
During the four freight-industry downturns that have occurred over the past two decades — excluding downturns that coincided with a broader slowdown in the economy — the odds that a truck driver will exit the profession to a new occupation is not statistically different from the odds that they will exit during freight industry expansions.
This suggests that, contrary to recent fears of an exodus of drivers as a result of recent carrier bankruptcies, the odds that a driver will leave the industry altogether depends more on what is happening in the rest of the economy than what is happening in the trucking industry.
Truck drivers are increasingly drawn to management, sales and office support jobs and to other jobs in the transportation and warehousing sector
Over the past decade, about one-in-eight truck drivers who decided to change careers moved into a management, sales or office support role at a company in the transportation and warehousing sector; 7% became warehouse workers and 4% became taxi or chauffeur service drivers. In total, nearly one-in-four (23%) ex-truckers remain in the transportation and warehousing sector.
Jobs in construction (particularly during the early- and mid-2000s),and retail were the next most common draws for former truck drivers, each attracting about one-in-nine (11%) former truck drivers. More recently, drivers exiting the freight industry are increasingly drawn to “management, sales and office support” jobs and other jobs in the transportation and warehousing sector.
After a decade of economic expansion, the American labor market is experiencing near-record employment. The trucking industry has been somewhat of an outlier: As a result of slack demand, a rapid expansion of supply during the prior two years, and rising regulatory costs, a steady drip of trucking companies have been forced to shut down over the past few months. But the freight industry is cyclical and sooner or later, the tides will turn. It is natural to ask the question whether these workers will still be there when it does happen.
Looking at trends over the past two decades helps clarify where these fears might be misplaced and where there is, indeed, cause for concern.
The vast majority of truck drivers continue to haul loads year after year, though at any given point about one-third are likely to exit the profession over the coming year. The odds of a career change are neither particularly high, nor particularly low, compared to other occupations and do not necessarily ebb and flow over the business cycle. Truckers are, after all, licensed professionals who have an enormous investment in their careers and licensed professionals are less likely to change careers than workers in jobs that do not require certification.
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Aaron Terrazas is Director of Economic Research at Convoy where he researches and comments on freight markets and what freight reveals about the broader economy. Prior to joining Convoy, Aaron was a Senior Economist and Director of Economic Research at Zillow. Before that, he was an Economist at the U.S. Treasury Department’s Office of Economic Policy in Washington, D.C. He was educated at Georgetown University and Johns Hopkins University. Aaron has been a runner since age 13 and is a sucker for all endurance sports.